Effects of Credit on Economic Growth, Unemployment and Poverty

Abstract Effect of credit on economic growth, unemployment and poverty provides evidence from Indonesia on the role of banks credit for promoting economic growth and reducing both unemployment and poverty. To document the link between banks credit and economic growth, we estimate a VAR model and variance decompositions of annual GDP per capita growth rates to examine what proxy measures of banks credit are most important in accounting for economic growth over time and how much they contribute to explaining economic growth. We also estimate an ECM to document the relationship between banks credit to both unemployment and poverty. This paper revealed bi-direction causality between banks credit and economic growth. Banks credit promotes economic growth and economic growth affects credit depth and financial development. Furthermore, banks credit is a growth accelerating factor on Indonesian economic growth. Banks credit is an endogenous growth and a good predictor on Indonesian economy.Our estimation model explained that credit allocated by banks increases business escalation to the real sectors then promotes economic growth, decreases unemployment rate through increasing in labor demanded, increases income and then decrease poverty. This overall transmission mechanism just occurred through presence of banks credit by increasing money supply to the real sectors, promotes growth and social welfare. Keywords : banks credit, economic growth, growth accelerating factor, poverty, unemployment JEL Classification : E51, E52, E58

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Real exchange rate and innovation: empirical evidences

Brazilian Journal of Political Economy ◽

10.1590/0101-31572018v38n02a04 ◽

2018 ◽

Vol 38 (2) ◽

pp. 280-303 ◽

Cited By ~ 1

Author(s):

KEYNIS CÂNDIDO DE SOUTO ◽

MARCO FLÁVIO CUNHA RESENDE

Keyword(s):

Economic Growth ◽

Exchange Rate ◽

Real Exchange Rate ◽

Transmission Mechanism ◽

The Real ◽

Considerable Portion ◽

Rate Effects ◽

Recent Debate ◽

The Relationship

ABSTRACT The recent debate on the determinants of the lung-run economic growth highlights the role of a competitive and stable real exchange rate to foster growth. In this debate, the works follow two approaches: theoretical and empirical. In the theoretical approach a considerable portion of the works points towards the innovation as a transmission mechanism of the real exchange rate effects on income. These works emphasize that the real exchange rate affects growth because of its impacts on the determinants of innovation, such as investment. Despite the theoretical debate, the focus of empirical works is on the analysis of the exchange rate effects on income while the relationship between exchange rate and innovation remains untapped. This article seeks to contribute to the literature by providing empirical evidence that supports the link between the real exchange rate and innovation.

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Fiscal Policy, Institutions, and Economic Growth in Asian Countries: Evidence from Pedroni’s Cointegration Approach

Malaysian Management Journal ◽

10.32890/mmj.12.1-2.2008.8956 ◽

2020 ◽

Author(s):

Hussin Abdullah ◽

Muzafar Shah Habibullah ◽

Ahmad Zubaidi BAHARUMSHAH

Keyword(s):

Economic Growth ◽

Fiscal Policy ◽

Government Expenditure ◽

Jel Classification ◽

Per Capita Gdp ◽

The Real ◽

Long Run ◽

Asian Economies ◽

Per Capita

This paper investigates the relationship between fiscal policy, institutions, and economic growth and also the role of the institution in Asian economies between 1982 and 2001 through the application of Pedroni’s Cointegration approach. It examined two different channels through which fiscal policy and institutions can affect long-run economic growth in Asian economies. The first channel is when aggregate of government expenditure, aggregate of other fiscal variables, and the institution affect the real per capita Gross Domestic Production (GDP) and the second channel is to determine the role of institutions on the real per capita GDP. The Pedroni Cointegration result established a long-run relationship between fiscal policy, institution, and economic growth. We found a positive and statistically significant impact of aggregate of government expenditure and aggregate of other fiscal variables and institution on real per capita GDP. We also found that there is a role of institutions on the real per capita GDP. JEL Classification: C23, H30, H50, O47

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The Nexus between Resource Mobilization by Mutual Funds and Economic Growth in India

Global Business Review ◽

10.1177/097215091101300108 ◽

2012 ◽

Vol 13 (1) ◽

pp. 123-136 ◽

Cited By ~ 2

Author(s):

P.K. Mishra

Keyword(s):

Economic Growth ◽

Mutual Funds ◽

Developing Country ◽

Resource Mobilization ◽

The Real ◽

Long Run ◽

Policy Variable ◽

Short Run ◽

The Relationship

Mutual funds allow for portfolio diversification and relative risk aversion through collection of funds from the households and investment of the same in the stock and debt markets. In this process, mutual funds industry plays the most important role of a resource mobilizer. As a resource mobilizer, the industry collects the investible surpluses from the surplus-spending units and channelizes the same to the deficit-spending units of an economy. Such a function has wide relevance for a developing country like India. Arguably, mutual funds industry as a resource mobilizer appears to contribute to real economic growth of a country by reducing the transaction costs and raising the purchasing power of the investors. Thus, this article is an attempt to investigate the dynamics of the relationship between gross funds mobilized by mutual funds and the real economic growth of a developing country like India for the period 1970–71 to 2008–09. Using the time series econometric techniques of cointegration and error correction estimates, the study concludes that the growth in real gross domestic product Granger causes gross resource mobilization by mutual funds in the long run, but not in the short run. This finding supports the demand-following hypothesis and thus, the policy implication is that the real economic growth of India may be considered as the policy variable to augment the resource mobilization by mutual funds.

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Climate Change and Economic Growth: The Role of Environmental Policy Stringency

Sustainability ◽

10.3390/su11082273 ◽

2019 ◽

Vol 11 (8) ◽

pp. 2273

Author(s):

Enrico Maria de Angelis ◽

Marina Di Giacomo ◽

Davide Vannoni

Keyword(s):

Climate Change ◽

Economic Growth ◽

Fixed Effects ◽

Kuznets Curve ◽

Negative Externalities ◽

Per Capita ◽

Mitigate Climate Change ◽

The Relationship ◽

Shaped Pattern

The paper investigates the relationship between economic growth and environmental quality in the context of the Kuznets curve, which foresees that growth, while initially causing negative externalities for the environment, eventually can be seen also as the solution to environmental degradation. The novelty of the paper is to analyze the role of environmental policies, and in particular the use of market-based and non-market instruments to challenge the pollution plague and mitigate climate change. The results of fixed effects estimates on a sample of 32 countries observed for the period 1992–2012 show the existence of an inverted U-shaped relationship between per capita gross domestic product (GDP) and per-capita CO2 emissions for the quadratic specification, as well as of an N-shaped pattern for the cubic specification. Most importantly, the stringency indexes, i.e., the proxies used to account for environmental regulation, exhibit negative and strongly significant coefficients, suggesting that the policies are effective in reducing environmental damages associated with economic growth.

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The Role of Exports in African Economic Development: A Comparative Study of Mauritius and Tunisia

10.26686/wgtn.16992625.v1 ◽

2021 ◽

Author(s):

◽

Simon Michael Carey

Keyword(s):

Economic Growth ◽

Growth Process ◽

Institutional Environment ◽

Real Gdp ◽

Export Policies ◽

Real Gdp Per Capita ◽

Per Capita ◽

Econometric Tests ◽

The Relationship

<p>Mauritius and Tunisia stand out as two remarkable exceptions to the African economic growth experience. Since their respective independences in 1968 and 1956, both have achieved average real GDP per capita growth well in excess of three percent per year. Export policies featured highly in the developmental strategies of both countries as they transitioned through a dependency on agriculture into manufacturing and then services. What makes this comparison so interesting is that despite such similar success, Tunisia and Mauritius are fundamentally very different. This study comprises the first ever in-depth comparison of these two countries, presenting a qualitative analysis and then augmenting it with a comprehensive set of econometric tests. The focus is on the relationship between exports and economic growth, but the discussion explores the wider context in both countries. Using the Granger-causality approach, we find strong evidence for export-led growth in Mauritius, but no significant evidence of any causal relationship in Tunisia. On the basis of a broader analysis we argue that exports were still important in both countries, but appear to have been more central to the growth process in Mauritius. This broader analysis also highlights that other factors – such as a strong institutional environment – were important in facilitating or directly contributing to such consistent growth.</p>

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Environmental Kuznets curve and growth source in Iran

Panoeconomicus ◽

10.2298/pan1205609a ◽

2012 ◽

Vol 59 (5) ◽

pp. 609-623 ◽

Cited By ~ 9

Author(s):

Maryam Asghari

Keyword(s):

Economic Growth ◽

Environmental Degradation ◽

Environmental Kuznets Curve ◽

Co2 Emission ◽

Turning Point ◽

Kuznets Curve ◽

Per Capita ◽

The Relationship

Recent empirical research has examined the relationship between certain indicators of environmental degradation and income, concluding that in some cases an inverted U-shaped relationship, which has been called an environmental Kuznets curve (EKC), exists between these variables. The source of growth explanation is important for two reasons. First, it demonstrates how the pollution consequences of growth depend on the source of growth. Therefore, the analogy drawn by some in the environmental community between the damaging effects of economic development and those of liberalized trade is, at best, incomplete. Second, the source of growth explanation demonstrates that a strong policy response to income gains is not necessary for pollution to fall with growth. The aim of this paper investigates the role of differences source of growth in environmental quality of Iran. The results show the two growth resources in Iran cause, in the early stages, CO2 emission decreases until turning point but beyond this level of income per capita, economic growth leads to environmental degradation. I find a U relationship between environmental degradation (CO2 emission) and economic growth in Iran.

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Effects of Fiscal Policy and Institutions on the Economic Growth of Asian Economies: Evidence from Dynamic Panel Data Analysis

International Journal of Management Studies ◽

10.32890/ijms.16.1.2009.9963 ◽

2009 ◽

Author(s):

Hussin Abdullah ◽

Muzafar Shah Habibullah ◽

Ahmad Zubaidi BAHARUMSHAH

Keyword(s):

Economic Growth ◽

Fiscal Policy ◽

Government Expenditure ◽

Dynamic Panel Data ◽

Dynamic Panel ◽

Per Capita Gdp ◽

The Real ◽

Long Run ◽

Per Capita

This paper investigates the effects of fiscal policy and institutions on the economic growth of Asian economies through the application of the GMM-SYS approach to dynamic panel estimator as a preference analysis. It examines two different channels through which fiscal policy can affect long-run economic growth in Asia. The first channel is when aggregate government expenditure, aggregate of other fiscal variables, and institution affect the real per capita GDP, and the second channel is to determine the role of institutions on the real per capita GDP. The dynamic panel data result, especially GMM-SYS, established a long-run relationship between fiscal policy, institution, and economic growth. We found positive and statistically significant impact of aggregate of government expenditure and aggregate of other fiscal variables and institution on real per capita GDP. Furthermore, we found that there is a role of institutions on the real per capita GDP.

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Evaluating the Effect of Covid-19 on the Palestinian Economy by Estimating the Relationship Between Economic Growth and Unemployment in Palestine

Studies in Business and Economics ◽

10.2478/sbe-2021-0034 ◽

2021 ◽

Vol 16 (2) ◽

pp. 206-217

Author(s):

Wisam A. Samarah

Keyword(s):

Economic Growth ◽

Unemployment Rate ◽

Open Economy ◽

Gdp Per Capita ◽

Palestinian Economy ◽

Per Capita ◽

High Level ◽

The Relationship ◽

Percent Decrease

Abstract The Palestinian economy is a small and open economy that is characterized with a high level of uncertainty. The purpose of this paper is to determine the effect of COVID-19 on the economic growth in Palestine through estimating the relationship between economic growth and unemployment. We will use the GDP per capita to measure economic growth and unemployment rate in Palestine. Thus we will also look at the Palestinian labor force and determine whether the job creation is successful in absorbing the rising rates of unemployment and determine how COVID-19 will affect unemployment rates. This is an effort to study where the Palestinian economy is heading and gives suggestions of how we can avoid the convergence into a Volatility Uncertainty Complexity Ambiguity environment. The data was taken from the Palestinian Central Bureau of Statistics for the period from 1995 to 2018. The time series analysis indicated that a 1 percent increase in the unemployment rate will result in a 0.356 percent decrease in the GDP per capita. Given the continuation of the Israeli occupation, the Palestinian government plays the role of “crisis management”.

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